Lithium ion has dominated the energy storage conversation as the battery predicted to dramatically change the global energy system but New York-based Eos believes its chemistry is a better fit, not least for the integration of distributed energy resources.

Decentralized Energy spoke to Chip Russell, Director Business Development at Eos Energy Storage, about the company’s zinc hybrid cathode battery technology.Eos Energy Storage stacks

Eos Energy Storage believes it is significantly changing the market landscape for alternative chemistry and grid-scale batteries.

The company is further solidifying its position as energy storage cost leader by becoming the first battery manufacturer to offer DC battery storage systems at below $100 per kWhUnder Eos’ new forward pricing guarantee, 50 MW volume orders for delivery in 2022 will be locked in at $95/kWh. This marks a significant step forward for the proliferation of affordable grid-scale energy storage solutions.

But the company also has plenty to offer at the smaller scale.

Decentralized Energy (DE): What are the particular advantages associated with your technology, especially in the decentralized energy space?

Chip Russell (CR): “We’re technology agnostic and use case agnostic as long as it’s economically feasible and or makes sense.”

“Our technology informs our product and that product is optimised for a four-hour run time. It’s very much an energy battery as opposed to a power battery and there are a lot of advantages with respect to the build materials that help create the lowest cost system on the market today, both in terms of Capex and levelized cost of energy (LCOE).”

“That really opens a lot of opportunity to interact with technologies such as combined heat and power, microgrid, and solar plus storage players. As well as solar plus storage plus diesel.”

“For example in a microgrid you can turn down a traditional diesel generator asset and with solar plus storage play with the 4-6 hour runtime application you can increase the solar capacity factor and reduce fuel costs at the diesel side. You also then rest fuel availability on the diesel side such that you have a combined solar plus storage plus diesel LCOE that’s actually cheaper than the traditional solar diesel array.”

“It allows diesel to be scaled back and or allows renewables to penetrate appropriately to play a more important role in these distributed energy resources or microgrids. There is no limit to what we can work with from a technology standpoint- its more about it being making sense from an economic standpoint.”


DE: There are a lot of other providers in the hybrid energy space. What makes your solution stand out?

CR: 2017 is the first year of commercial installation for Eos but we are looking forward to leading the market in energy storage applications and the subset of that will be microgrid play.

We are not yet leading but given our cost structure we are looking for to be leaders 2-3 years from now.”


A Better Alternative to lithium ion?

DE: Is your offering a better solution than what purveyors of lithium ion-based solutions have to offer?

CR: “Better is an operative word and depends on who you ask. We at E.os think the answer is yes and for a number of reasons.”

“One is you can break the world of energy storage into energy applications and power applications. In terms of supporting distributed energy resources and or microgrid or the ability to provide capacity when the grid is congested we think energy storage solutions that have a run time of say 4-6 hours are going to be more useful to support those use case applications than power batteries with lithium support which are optimised typically around less than 2 hours of run time.”

“If you are looking at a power application which is perhaps smoothing intermittency curve to renewables and or playing in frequency regulation markets, or where you need less than an hour worth of power, lithium ion batteries are a good fit.”

“If you are looking for multiple hours of discharge which is really important for microgrids and DER solutions lithium is not the most optimal solution.”

“On top of that cost is obviously important. There are two elements to that – what does it cost to buy the asset, the upfront capex? We are about 30-40 per cent lower than most lithium vendors on that front and that would enable more developers to get projects off the ground because the economics work out.

“The second element is LCOE. The total cost of ownership from a user or develop perspective over 20 years – most lithium technologies need dedicated heating and cooling systems and fire protection systems to operate that chemistry appropriately and safely. That adds costs on an upfront basis and over that 20 year lifetime.”

“Through not being a lithium-based system due to bill of materials on an Eos system we can reduce all those costs upfront and over a 20 year life thus enabling more projects.”

“The ability to store energy has always been cost prohibitive when you look at the markets in the US and abroad so you’re looking for an energy battery and kilowatt hour reflex engine that can deliver 4-6 hours of power cheaply and cost competitively and we personally don’t think lithium is the way to go”


DE: How would lithium’s defenders counter that? If they can’t compete with your zinc offering on duration or cost, why is lithium still preeminent? Is it because it’s more established?

CR: “That’s certainly part of it – lithium is certainly the more mature technology so there is a little bit of reduced risk for the developer and from the off takers perspective. There is more fuel deployment of lithium so then it is typically easier to get financing for these solutions in the field with bankers and insurance companies offering capital at a lower rate for techs that are a bit more mature.”

“It’s important to note that lithium can provide multiple hours of electricity but you just need to purchase multiple lithium systems. So again it comes back to cost – you basically oversize your system to meet the operating requirements of that off taker but it’s just going to be more costly do so.”


Other Persuasive Factors

DE
: The chemistry involved in lithium adds to its cost issues?

CR: Safety is a big component and the need for dedicated fire suppression from a cost standpoint, obviously depending on where assets are deployed and who is operating them, the risk of thermal propagation runaway, a fancy way of saying explosion, there is a question on whether lithium is the safest solution on the market. There is no risk of toxic material or explosion on the Eos side.”

“So outside of cost there are some interesting advantageous parameters and one may not choose to purchase lithium because of that. Considering where technologies are today with respect to non-lithium we are probably going to see more of those percolating into the market over the next year or two.”


DE:
What ingredients make up your battery and how did the business evolve to where it is now?

CR: “Our batteries are made up of zinc, non-flammable plastic, salt water electrolyte, titanium carbon – salt water electrolyte is the special sauce”

“We were founded in 2008 and some of the original patenting underlying the IP today has been around since 2004. That patent cleared in 08 and that’s when the company started. We have been largely a research and development shop until 2014. Then the last few years we’ve made that move from R&D to product manufacturing where we are actually deploying systems commercially.”

“Back in 2008 when we weren’t working with any one type of technology, the founders of the company, on a directive from the board, formed what is called the genesis programme, and spoke to the utilities, developers, IPPS and end customers and asked what is the largest unmet market need today.”

“And now we create a solution that meets that need at a particular cost so for the next 10 years we have been developing that solution. We like to articulate that we are a market driven business case driven solution. We went to the market and the end customer and asked what do you need and at what price point will this work?”

“That’s very different from lithium which has been around since the 70s and is very much a derivation of the power, electronics and automotive industry and they are now trying to migrate it to the stationary energy storage industry. While there are some interesting overlaps we just don’t feel the lithium is the chemistry to attack against those large markets globally.”

“For the utility industry cost, safety and reliability are the most important parameters to optimise around. If you look at our tech specifications we are a little bit larger and heavier than most of the incumbent solutions on the market today but we feel that lithium is optimised around energy density and power applications which are great for cell phones and cars but not necessarily what large utilities are looking for.”

Positioning In The Market

DE:
In terms of company positioning, is your product set to be a big or small part of the storage revolution, up there with the likes of Tesla? Or will there be a certain amount of takeovers once technologies emerge and are obviously more progressive than the established offerings?

CR: “
I want to be careful on commenting on where I see the future. But what I can say about the vendor landscape and whether it’s going to consolidate like the airline industry for instance, is I do think the market is large enough that it isn’t going to be a zero sum game.”

“There is going to be a lot of energy storage and battery storage out there and that’s partly because the range of use cases and markets are so vast. That comes back to the appropriate product or chemistry for the appropriate application.”

“It’s analogous to the automotive vehicle; a tractor is good for farming, while Ferraris are good for race car driving. So too very different products for different needs. There’s markets for both but not necessarily overlap.”

“There will be products optimised for residential market, for microgrid solutions, for the large-scale utility market in acting as a capacity resource at substations.”

“I don’t see it necessarily consolidating into one or two products and or companies but you are right to point out that this is still a bit wild west and there is a lot of unknowns. There will naturally be some consolidation and some will have greater infant mortality risk but there will be a lot of healthy companies that come out of this in the next two to five years.”


DE
: Part of the company’s mission, as indeed could be the mission statement for all storage entities, is for the technology to assist in helping renewables become more successful.

CR: “The basic value proposition is that the typical intermittent renewable profile is not coincident with peak demand. The only way to do it is to store the unused energy in the off-peak hours and discharge it during the peak hours. The solar plus storage asset is much more useful to the utility or off taker than simply just a solar asset.”

“That’s all achieved through multiple hour worth of delivered energy and being cost competitive and not too expensive from the off takers perspective.”


Winning Over The Investment Community

DE: There is a degree of cynicism out there in some quarters about the claims being made for storage, that its too expensive to make a real impact being one. That appears to be changing but do you encounter much dissent when persuading other actors about the merits of your technology? Are network operators doing enough to facilitate storage and DER for example?
In short, are you meeting resistance?

CR: “At a high level the answer is usually no. Most people you talk to will buy into the value proposition of storage but implementing it however becomes a whole other matter.”

“It’s such a new industry and a very capital intensive environment – the industry has not really evolved yet and there is a lot of learning to happen. But system operators or utilities don’t disagree on paper, its more to do with putting these assets in the ground and in a  timely and a cost effective manner.”


DE: So it’s a matter of developing confidence in the investment community?

CR: “There are two main barriers to storage penetration –one is cost of the technology and product itself.”

“Unless you have developers with a large balance sheet you will need to find lending to put projects into the ground. It’s a matter of lending institutions getting comfortable with new technologies. The more systems we have on the ground the more data we have to prove the technology works and then the cheaper capital becomes available to develop the projects.”